Making Tax Digital (MTD) is entering its next major phase, and many sole traders and landlords will soon be required to follow new digital reporting rules. These changes are designed to modernise the tax system, reduce errors, and give individuals a clearer picture of their tax position throughout the year.
At RipSol Ltd, we’re here to help you understand what’s changing and what you need to do to stay compliant.
1. Who Will Be Affected by the New MTD Rules?
The upcoming phase of MTD applies to:
• Sole traders with business income above the threshold
• Landlords with property income above the threshold
• Individuals with combined business and property income over the limit
If your income falls below the threshold, you may not be required to join MTD yet but voluntary adoption can still make your bookkeeping easier and more accurate.
2. Quarterly Digital Updates Replace the Old Annual Process
Under MTD, you’ll no longer wait until the end of the tax year to submit all your figures.
Instead, you’ll need to:
• Keep digital records
• Use HMRC approved software
• Submit quarterly updates throughout the year
• Finalise your figures with an End of Period Statement
This means your tax position becomes clearer, earlier, and more predictable.
3. Digital Record Keeping Becomes Mandatory
Paper records and spreadsheets will no longer meet HMRC requirements for those within MTD.
You must use compatible digital software to record:
• Sales
• Expenses
• Allowable deductions
• Property income (if applicable)
Cloud accounting tools like Xero, QuickBooks, and Sage are fully compliant and make the process far easier.
4. A New Annual Final Declaration
The traditional Self Assessment return will be replaced by a Final Declaration.
This confirms:
• All income
• All adjustments
• All reliefs
• Your final tax position for the year
It’s similar in purpose to the old Self Assessment, but built on top of your quarterly submissions.
5. What You Should Do Now
To prepare for the transition, it’s worth taking a few simple steps:
• Check whether your income puts you within the new MTD rules
• Move to cloud bookkeeping software if you haven’t already
• Review your record keeping habits to ensure everything is captured digitally
• Plan ahead for quarterly submissions so you’re not rushing at deadlines
• Speak to your accountant if you’re unsure how the changes apply to you
Getting set up early means a smoother, stress‑free transition.
6. How RipSol Ltd Can Support You
We help clients:
• Choose and set up the right MTD compatible software
• Keep accurate digital records
• Stay on top of quarterly submissions
• Understand their tax position throughout the year
• Avoid penalties and last‑minute stress
Our goal is to make compliance simple, clear, and manageable so you can focus on running your business.
At RipSol Ltd, we deliver expert financial support tailored to your business needs. Whether you're a sole trader, small business, or growing enterprise, our services are designed to be accurate,…
